Online estate agency Purplebricks has announced it has entered a conditional sale agreement to transfer its business, assets, and most of its liabilities to rival Strike for £1.
The deal – which is subject to shareholder approval – will see CEO Helena Marston step down upon completion. All other employees will transfer to Strike, though it is anticipated that there will be reductions in headcount in the short term as part of a wider cost reduction in the business.
The net cash balance up to a value of £5.5 million – after the deduction of certain costs and expenses to meet any liabilities not passed onto Strike – will be retained by Purplebricks and distributed to shareholders, whose approval (>50%) of the deal itself is required.
This announcement comes after a period of uncertainty for the online agency, with its board suggesting in February that its potential may be enhanced under an “alternative ownership structure” and announced a strategic review.
Stepping down from her role as CEO, Helena Marston said the strategic review and subsequent formal sale process “created increased uncertainty in the business resulting in a need to draw this process to conclusion”, adding that this “has been accentuated by the timing of expiry of [the] relationship which lets us provide pay later solution”.
“Taking the actions we did has allowed us to secure a solvent outcome, which protects the future of the business and the Purplebricks consumer driven brand, alongside the benefits of further investment,” Marston added, concluding:
“It has been a challenging and uncertain time but the passion and commitment of our people has been tremendous and I sincerely wish everyone the very best for the future.”
Sir Charles Dunstone, partner, Freston Ventures – joint major shareholder of Strike – added:
“We remain committed to the online model, which offers customers a much better experience at a far lower cost. This is a positive outcome for anyone looking to sell their home and save money doing so. Purplebricks has dramatically changed the industry by driving down the cost of estate agency and we aim to combine its significant brand recognition with an even more disruptive business model.
In bringing together the two brands, we will supercharge Strike’s mission to democratise house selling by empowering customers to have more control over a process that has barely changed for 200 years.
At Freston Ventures we are focused on building household brands that are trusted by consumers across the UK. We believe there is a better way to sell your house and through this deal, we are developing the market-leading brand to deliver it.”
